Tokyo CPI Falls, Nikkei Hits 33-Year High

January 09, 2024 11:25

As financial markets warm up after the new year break, the Australian and Japanese inflation data are among the most important financial data releases. Although Tuesday is a light calendar day, the Nikkei made the financial news headlines as it hit a 33-year high on the back of rising tech stocks.

Oil prices stabilised on Tuesday morning after recording large drops on Monday. Top oil exporter Saudi Arabia announced that it would cut crude prices to reach the lowest level recorded in the last 27 months.

In other news, Samsung, the world’s top producer of memory chips, smartphones and televisions announced that it is likely to see its profits for the last three months of 2023 fall by more than 30%. While the earnings report is expected to be published on January 31st, analysts suggested that lower than anticipated electronic devices sales, as well as the build up of stock of key components, could have played a role.

Australian CPI Inflation November 2023

The Australian Bureau of Statistics (ABS) will publish November’s inflation figures on Wednesday morning. Although the most critical data comes from the quarterly reports, economists also focus on monthly inflation reports to understand how prices evolve and their impact on the local economy.

Market analysts suggest that CPI inflation came in at 4.4% on an annualised basis, falling from the 4.9% figure recorded in October. A note by ING economists said that “last year’s surge in energy and food prices on the back of unseasonal cold and wet weather is unlikely to be repeated, at least not to the same extent, though we note that recent flooding in Queensland could still push up the prices in some areas. Even so, the comparison with last year’s spikes should be benign enough to see the inflation rate decline – perhaps substantially.”

Tokyo CPI December 2023

A survey published by the Statistics Bureau of Japan showed that Tokyo CPI inflation fell to 2.4% in December from 2.6% recorded in November. The core Tokyo CPI inflation came in at 2.1%, in line with analysts’ expectations.

Although inflation figures dropped in December, they are still far from the Bank of Japan’s (BoJ) target of 2%. Right after the release of the inflation report, the Japanese yen rose against the US dollar as some traders believed that the BoJ would have to start phasing out its massive stimulus sometime this year.

Morgan Stanley: Fed To Hold Rates Steady For Longer

Morgan Stanley economists suggested that the Federal Reserve could hold rates steady for longer than the market expects, adding that the delay would have, as a result, more than anticipated rate cuts. Morgan Stanley’s analysts now expect the first rate cut to be equal to 25bps and to take place in June.

 Speaking at a conference, Morgan Stanley’s US chief economist said: “make no mistake, they will be cutting rates this year. They can be patient and they can take their time.”

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Miltos Skemperis
Miltos Skemperis Financial Content Writer

Miltos Skemperis’ background is in journalism and business management. He has worked as a reporter on various TV news channels and newspapers. Miltos has been working as a financial content writer for the last seven years.